Federal Government to Cancel Kaduna Electricity Licence Over N93.42bn Debt, States NERC

Mubashir Shehu

1 year ago

The Nigerian Electricity Regulatory Commission (NERC) has issued a notice stating its intention to cancel the Electricity Distribution Licence (EDL) granted to the Kaduna Electricity Distribution Company (KAEDCO). The decision comes in response to KAEDCO’s outstanding energy debt of over N93.42 billion and other infractions. NERC’s notice, published on May 15, 2023, allows the distribution company a 60-day window to repay the debt or face licence revocation.

According to NERC’s performance review for 2022, KAEDCO had only fulfilled 13.85% of its minimum payment obligation to the Nigerian Bulk Electricity Trading Plc (NBET) and the Market Operator (MO). The company had consistently underpaid by an average of N4.33 billion per month, accumulating to approximately N51.96 billion between January and December 2022. In addition to this, KAEDCO also owed historical outstanding debts of N41.49 billion for the period spanning 2015 to 2021, resulting in a total outstanding debt of N93.41 billion.

NERC has cited KAEDCO’s actions as clear violations of the Electric Power Sector Reform Act (EPSRA) and the terms and conditions of its Electricity Distribution Licence. The commission has requested KAEDCO to provide a written explanation within 60 days, stating why its licence should not be cancelled in accordance with section 74 of EPSRA.

This decision by the Federal Government to cancel KAEDCO’s licence emphasizes the need for electricity distribution companies to fulfill their financial obligations and adhere to regulatory guidelines. It underscores the government’s commitment to enforcing accountability and ensuring the stability of Nigeria’s electricity sector.

Source: Leadership Nigeria

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